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3 Great Funds for 2023 and Beyond

Get paid while you wait for the market to rebound.

3 Great Funds for 2023 and Beyond

Russ Kinnel: The upside of a brutal market in 2022 is that stocks and bonds are priced for solid returns going forward, and they even come with something we haven’t seen in a while: decent yields. Here then are three funds that look appealing to me for the long-term investor.

3 Great Funds for 2023 and Beyond

These funds earn Morningstar Analyst Ratings of Silver or Gold.

  1. PGIM Short Duration High Yield Income HYSAX
  2. Dodge & Cox Global Bond DODLX
  3. Vanguard High Dividend Yield Index VHYAX

If you want high-yield with less interest-rate risk, consider Silver-rated PGIM Short Duration High Yield Income. Despite a duration of just three years, the fund still has a yield of 7.8%—nearly matching those of the longer-term high-yield funds. This fund’s 5.9% loss in 2022 was half the category average, so it’s not a bad deal. PGIM has a strong high-yield team that is comparable to those at T. Rowe Price or Fidelity.

Dodge & Cox Global Bond sticks to investment-grade fare, so its yield is a more modest 5.9%, but that’s still pretty nice for a high-quality investment-grade fund. As with Dodge & Cox’s domestic-bond fund, this one mostly sticks to corporate bonds, government bonds, and mortgage-backed securities. We rate it Gold.

Finally, I have an equity fund that is worth a look. Vanguard High Dividend Yield Index is a Silver-rated fund that aims for stocks with robust yields, but it’s well-constructed to avoid the stocks with the highest risk.

Watch “T. Rowe Price’s Brutal 2022″ with Russ Kinnel.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Russel Kinnel

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Russel Kinnel is director of ratings, manager research, for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He heads the North American Medalist Rating Committee, which vets the Morningstar Medalist Rating™ for funds. He is the editor of Morningstar FundInvestor, a monthly newsletter, and has published a number of prominent studies of the fund industry covering subjects such as manager investment, expenses, and investor returns.

Since joining Morningstar in 1994, Kinnel has analyzed virtually every type of fund and has covered the most prominent fund families, including Fidelity, T. Rowe Price, and Vanguard. He has led studies on the predictive power of fund data and helped develop the Morningstar Rating for funds and the Morningstar Style Box methodology. He was co-author of the company's first book, Morningstar Guide to Mutual Funds: 5-Star Strategies for Success (Wiley, 2003), and was author of the book Fund Spy: Morningstar's Inside Secrets to Selecting Mutual Funds That Outperform, published in 2009.

Kinnel holds a bachelor's degree in economics and journalism from the University of Wisconsin.

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